KEY POINTS
- DEEN is potentially the only halal option in the industry: Deenar co-founder Maruf Yusupov
- The stablecoin is a much more affordable alternative to storing physical gold
- Yusupov believes DEEN can help broaden HAQQ's appeal to other audiences
- He sees the global stablecoin market expanding to a staggering $1 trillion valuation by 2030
Stablecoins are known for their distinctive "stable" feature that separates them from other types of digital assets that are highly volatile and are easily affected by market sentiment, but a new stablecoin is breaking even more barriers as it is not only Shariah compliant, but it is also a token backed by a "non-political" asset.
The Deenar (DEEN) recently went live on HAQQ Network, an EVM-equivalent blockchain based on Cosmos, and since then, it has been gaining attention in the cryptocurrency space.
A Stable Stablecoin
What can be more stable than gold? A "stable" stablecoin called Deenar, backed by one gram of gold that's securely stored with Brinks, a trusted global custodian. The stable token is issued by fiduciary standard and registered in Switzerland, ensuring compliance and security. It is also built on ERC-20 protocols and is compatible with HAQQ and Ethereum wallets.
DEEN tokens are redeemable to high-purity physical gold, and are 100% halal digital coins. A very significant feature of the Deenar is that 1% of sales goes to charity, paving the way for a more purposeful way of using crypto.
In an exclusive with International Business Times, Maruf Yusupov, the co-founder of Deenar, talked about the journey toward launching the token, what makes it special, and why it could be a better investment than physical gold.
What is @DeenarGold and its benefits for the gold market? 🌏
— HAQQ Network (@The_HaqqNetwork) August 23, 2024
→ $DEEN is a gold-backed stablecoin, with each token representing 1g of physical gold, ensuring stable and secure value.
→ Deenar Gold is poised for real-world implementation like international cross-border… pic.twitter.com/8226Xx94YL
A Different Path for $DEEN
Yusupov shared that in the journey to creating Deenar, the goal was to develop a stablecoin that "genuinely stands out." To achieve the said goal, the team prioritized determining which reserve should back the token to ensure its stability. Most stablecoins are pegged to fiat currencies, but the Deenar team opted for a completely different route forward.
"Gold provides a tangible and reliable asset base, making Deenar a stable hedge against inflation and economic uncertainty," he said. He noted how the value of major fiat currencies such as the U.S. dollar and the euro has largely been affected by inflation in the last decade.
What's So Special About the Deenar?
The Deenar provides a host of benefits for its users – stability and purposeful transactions – but there are three top qualities that make it stand out in the stablecoin market.
First, the digital coin is backed by gold, which Yusupov notes is a "non-political" asset. "It's not tied to any one country's economic policies. It's a global asset that remains valuable regardless of the actions of individual governments," he explained.
Do you know that 1% of revenue generated from $DEEN sales is allocated to charity?
— Deenar Gold (@DeenarGold) August 30, 2024
Here are 5 facts you should know about Deenar Gold: pic.twitter.com/3O7gRKjwvX
Yusupov's comments are backed by data. Tether (USDT), a U.S. dollar-backed stablecoin, has been on a rocky path in the past 24 hours, as per data from CoinGecko. The same can be said about the USD Coin (USDC), another stablecoin pegged to the U.S. dollar.
Another top distinctive feature of the DEEN is Shariah compliance. "Our stablecoin is potentially the only halal option in the industry. We've ensured that Deenar is fully compliant with Shariah law, avoiding practices like interest (riba) and maintaining ethical financial dealings," Yusupov said. The token has also received a fatwa to reflect its Shariah compliance.
Finally, the Deenar is a digital asset championing inclusion. For the DEEN team, it is crucial to reach unbanked and underbanked populations, especially in Muslim-majority regions. "By leveraging blockchain, this stablecoin offers secure, low-cost financial transactions, making it an accessible tool for those who have traditionally been excluded from the financial system," Yusupov said.
Eliminating the Complexities Related to Physical Gold Investments
In an age where people are in search of assets that will give them the best gains from their investments, the Deenar offers an alternative to the hassle of physically managing gold.
For one, storing physical gold is very complex and can be very expensive. DEEN, the first gold-backed token on Cosmos, either eliminates or significantly reduces the costs that come with physical gold storage. "You're basically investing in a digital version of gold, which is a far more cost-effective option for investors who want to avoid the overhead associated with physical storage," Yusupov said.
Introducing Deenar, a digital stablecoin backed by physical gold and built on @The_HaqqNetwork.
— Deenar Gold (@DeenarGold) August 13, 2024
1 $DEEN represents 1 gram of physical gold stored in audited vaults with Brink’s in Dubai. It’s designed to track the real-time market price of gold. pic.twitter.com/cqWo0mnSdv
It's quite understandable that not everyone can afford to invest in large quantities of gold, but with DEEN's fractional ownership offering, investors can buy as much or as little as they want.
Furthermore, the stablecoin can easily be integrated with digital financial platforms, which allows users to engage with DeFi applications, digital wallets, and smart contracts. "You can do more than just hold gold – you can earn yields, lend, and participate in decentralized finance markets, all while benefiting from the stability of gold," Yusupov noted.
A Stablecoin Tailored to the Global Muslim Population
Yusupov believes the Deenar will boost the utility and use case of the HAQQ Network. A gold-backed stablecoin is something most traditional blockchain networks lack. As HAQQ is also a convergence of Shariah-compliant philosophy and cutting-edge technology, the DEEN will feel right at home, being a stablecoin tailored to the two billion global Muslim population.
The group is faced with extremely difficult religious and ethical barriers when onboarding into the Web3 and blockchain space. But the DEEN isn't only specific to the Muslim population. It is also suitable for broader audiences across the traditional financial realm who value the security and stability that comes with gold. Yusupov sees the Deenar as a potential tool to broaden HAQQ's appeal to a wider and more diverse audience.
The Deenar may also help HAQQ Network move forward with its goal of increasing financial solutions aligned with Islamic principles. Since DEEN is a fully Shariah-compliant asset, it can possibly attract Muslim investors and financial institutions seeking to explore halal investment options.
"Deenar's stability and real-world backing make it particularly attractive to institutional investors. Institutions are often looking for low-volatility assets that still offer growth potential, and our stablecoin fits this bill perfectly. By making Deenar available on the HAQQ Network, we're opening the door to institutional players who are keen to diversify their portfolios with compliant and stable digital assets," Yusupov said.
Toward a $1T Market by 2030
As more people find interest in stablecoins due to the higher security they offer as opposed to other cryptocurrencies, Yusupov sees a multi-billion-dollar market ballooning into a $1 trillion market by 2030. The current global stablecoin market valuation at $168 billion is currently driven by USDT, but Yusupov believes it's just the beginning.
He acknowledged the stablecoins are just at the "surface level" of adoption. However, he believes these particular tokens will be largely integrated into mainstream finance as more consumers adopt the assets and demand significantly climbs in the next decade.
He also projected greater regulatory clarity for stablecoin holders, which will reduce risks associated with the assets. Naturally, assets with lesser risks become more appealing to institutional investors and corporations.
In the future, Yusupov envisions development of "more region-specific stablecoins tailored to comply with local laws, potentially boosting localized adoption and trust."
Yusupov isn't alone in seeing the stablecoin market boom. Earlier this year, blockchain enthusiast Sean Stein Smith said 2024 will be a "breakout year" for stablecoins, noting that this specific crypto segment has a "clear" business case compared to others.
